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Directors Report of Sunraj Diamond Exports Ltd.

Mar 31, 2014

The Members,

SUNRAJ DIAMOND EXPORTS LIMITED

The Directors'' have pleasure in presenting their Twenty Fourth Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS: (STANDALONE) (Amount in Rs ) 31st March, 31st March, 2014 2013 Profit before Depreciation and Interest 1,69,93,984 1,85,24,293

Less: Depreciation 13,44,221 11,81,120

Interest & Financial Expenses 1,26,94,107 140,38,328 85,48,817 97,29,937

Profit before Tax 29,55,656 87,94,356

Less: Provision for Taxation 7,88,000 29,84,000

Deferred Tax 1,68,138 9,56,138 149,510 31,33,510

Profit for the year 19,99,518 56,60,846

Add/(Less): Appropriation

- Provision of earlier years w/off (69,468) (74,604)

- Proposed Dividend - (53,30,400)

-Dividend Distribution Tax - (8,64,725)

- Trf.to Reserves - (1,39,656)

Add:Surplus brought forward from previous year 245,78,011 2,53,26,551

Balance Carried to Balance Sheet 2,65,08,061 2,45,78,011



FINANCIAL RESULTS: (CONSOLIDATED) (Amount in Rs) 31st March, 31st March, 2014 2013

Profit before Depreciation and Interest 1,79,52,112 2,90,32,340

Less: Depreciation 13,44,221 11,81,120

Interest & Financial Expenses 1,26,94,107 140,38,328 85,48,817 97,29,937

Profit before Tax 39,13,784 1,93,02,403

Less: Provision for Taxation 7,88,000 29,84,000

Deferred Tax 1,68,138 9,56,138 149,510 31,33,510

Profit for the year 29,57,646 1,61,68,893

Add/(Less): Appropriation

- Provision of earlier years w/off (69,468) (74,604)

- Proposed Dividend - (53,30,400)

- Dividend Distribution Tax - (8,64,725)

- Trf.to Reserves - (1,39,656)

Add: Surplus brought forward from previous year 3,50,86,058 2,53,26,551

Balance Carried to Balance Sheet 3,79,74,236 3,50,86,058

DIVIDEND:

During the preceding 3 years the company witnessed growth and a solid customer base with regular orders. The prolonged dip in the global economy, coupled with high prices of raw materials have been

detrimental to the growth prospects of the company in the completed financial year. Uncertain events in some countries along with a highly volatile currency has prompted the company to adopt a conservative approach in the short term. With a view to conserving the resources of your company, your Directors have decided not to recommend Dividend for the year.

OPERATIONS:

Your Company has recorded a turnover of ^ 3936.49 lacs during the year under review as opposed to ^ 5073.37 lacs in the previous year. After the first quarter of the financial year the economy saw a very volatile currency and slowdown in orders due to the high prices of raw materials. This in turn affected the production and prices of finished goods. The company was quick to recognize the slowdown and reduced the supplies of finished goods in line with the market trends, resulting in a dip in turnover, but a healthier performance. The company took an aggressive step in reducing debt thereby improving the overall performance.

UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND)

Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, unclaimed dividend which remains unpaid for a period of seven years shall be transferred to Investor Education & Protection Fund. Accordingly, the Company is not yet required to transfer unclaimed dividend to the said fund.

It may be noted that upon the transfer of dividend to Investor Education & Protection Fund, members lose their right to claim such dividend. Therefore Members are requested to claim the amount of Unpaid/unclaimed dividend for the year 2010-2011 onwards.

SUBSIDIARY COMPANIES

Your Company has incorporated a wholly owned foreign subsidiary Company in Dubai at the Dubai Multi Commodities Centre (DMCC), UAE in the name of SUNRAJ DIAMONDS DMCC. The above subsidiary company has started it''s business operations in the year under review.

CONSOLIDATED FINANCIAL STATEMENT

Sunraj group has reported a consolidated revenue of Rs.39.36 crores for the financial year ended on 31st March, 2014, consolidated profit before tax stood at X 39.14 Lacs and consolidated Profit after tax stood at X 28.88 Lacs. In accordance with the Accounting Standard AS-21 on Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for investment in Associates, your Directors provide the Consolidated Audited Financial Statement in the Annual Report.

However, in accordance with the general Circular No. 2/2011 dated 8th February, 2011, issued by the Ministry of Corporate affairs, Government of India, the Balance Sheet, Profit and Loss account and other documents of the subsidiary Company are not being attached with balance sheet of the Company. However the financial information of the subsidiary company is disclosed in the Annual Report in compliance with the said circular. Your Company will make available the said annual accounts and other related information of the subsidiary company upon request of any member of the Company or its subsidiary company and same will also be kept open for inspection by any member at the registered office of the Company and subsidiary company.

DIRECTORATE:

In accordance with Article 109 of the Articles of Association of the Company, Mr. Nirav Shah retires by rotation but being eligible, offers himself for re-appointment.

In line with the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, Mr. Jimit Shah and Mr. Hargovind Shah, Directors of the Company, are being appointed as Independent Directors for five consecutive years from the date of the ensuing Annual General Meeting. Mrs. Gandhi has been appointed as an Additional Director of the Company pursuant to the provisions of Section 161 of the Companies Act, 2013 and Article 109 of the Articles of Association of the Company. Her appointment will also fulfill the requirement of having a woman Director on the Board of Directors under the Companies Act, 2013. She will hold the office upto the date of the forthcoming Annual General Meeting and being eligible, offers herself for being appointed as a Director of the Company, liable to retire by rotation.

Necessary resolution for the appointment / re-appointment of the aforesaid Directors have been included in the notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the Notice. Yours Directors commend their appointment/ re-appointment. All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164(2) of the Companies Act, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the annexure to the Report.

PARTICULARS OF EMPLOYEES:

The Company does not have any employee covered under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and therefore, this information has not been furnished as part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March, 31st 2014 and of the Company for the period 1st April, 2013 to 31st March, 2014.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounts records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 to the Listing Agreement with the Stock Exchange a Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance form part of this Report.

AUDITORS:

M/s. Bhupendra Shroff & Co., Chartered Accountants, who are the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder, the Board recommends the re-appointment of M/s. Bhupendra Shroff & Co., as auditors of the Company. If re- appointed, they will hold office from the conclusion of the current AGM to the conclusion of the following AGM.

ACKNOWLEDGEMENTS:

The Directors acknowledge the co-operation and assistance received from the Banks and various Government agencies both Central and State.

The Directors wish to place on record their sincere appreciation of the contribution made by the employees at all levels of the organizations who have greatly contributed to the results.

For and on behalf of the Board of Directors Place : Mumbai, SUNNY GANDHI NIRAV SHAH Dated : 14th August, 2014 Executive Director Executive Director


Mar 31, 2013

To, The Members of SUNRAJ DIAMOND EXPORTS LIMITED

The Directors'' have pleasure in presenting their Twenty Third Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS:

STANDALONE

March 31,2013 March 31,2012

Profit before depre ciation and interest 18,524,293 22,031,990

Less: Depre ciation 11,81,120 10,49,836

Interest & Finan cial

Expenses 85,48,817 97,29,937 77,17.030

Profit before Tax 8,794,356

Less: Provi sion for

Taxa tion 2,984,000 4,366.925

Defe rred Tax 149,510 3,133,510 163,532

Profit for the year 5,660,846

Add / (Less): Appro pria tion

Pro vision of

earlier years w/off (74,604) -

- Pro posed

Divi dend (5,330,400) (5.330,400)

- Divi dend Distri bution Tax (864,725) (864,725)

- Trf. to Rese rves (139,656) (6,409,385) (218,367) (139,656) (6.409.385)

Add: Surplus brought forward from 25,326,551 25,326,551 23,005.376 previous year -

Balance Carried to Balance Sheet 24,578,012



CONSOLIDATED

March 31,2013

Profit before depre ciation and interest 29,041,819

Less: Depre ciation 11,81,120

Interest & Finan cial

Expenses 85,48,817 97,29,937

87.66,866

Profit before Tax 13,265.124 19,311,882

Less: Provi sion for

Taxa tion 2,984,000



Defe rred Tax 149,510 3,133,510

Profit for the year 8,734.667 16,178,372

Add / (Less): Appro pria tion

Pro vision of

earlier years w/off (74,604)

- Pro posed

Divi dend (5,330,400)

- Divi dend Distri bution Tax (864,725)

- Trf. to Rese rves (139,656) (6,409,385) (6,413,492)

Add: Surplus brought forward from 23,005.376 25,326,551 25,326,551

previous year -

Balance Carried to Balance Sheet 25,326,551 35,095,538

DIVIDEND:

Considering the Company''s performance, your Directors have recommended for approval of the shareholders a dividend ofRs. 1/-per Equity Share. (Previous Year Rs. 1/-per Equity Share). The total cash outgo on account of dividend for the year 2012-13 works out to Rs. 61.95 Lakhs including the Dividend Distribution Tax. The dividend subject to its declaration will be distributed to the shareholders, whose names appear on the Register of Members as on 30th September, 2013.

OPERATIONS:

Your company has recorded a turnover of X 50.73 cores during the year under review. The beginning of the financial year saw strong demand for Polished Diamonds in the local and international markets. The local market performed much better than previous years with substantial growth being recorded as opposed to exports.

The weakening currency played a major factor in determining the course of business activities through the financial year. The cost of Imports of Rough Diamonds rose substantially, as a result of which the raw material became more expensive. The effect of the currency translated into the local market seeing robust trading activity and therefore being able to procure Polished Diamonds at cheaper prices in dollar terms. This caused the company to reduce its manufacturing activity marginally and opt for local purchases towards the end of the financial year. The availability of Polished Diamonds at cheaper prices in the local market also translated in more profits being made on exports to our regular clients.

Order books being firm and growing over the years, our clients seemed to have retained faith in our abilities, and commitments to carry forward the ties have been displayed across various sizes and qualities of Polished Diamonds. The company continues to strive to move towards an in-house manufacturing base, however the current market conditions are such where the board feels that the outsourcing model still outweighs the fixed cost regime. In order to conserve resources through the difficult times ahead the board has decided to postpone the plan of setting up a manufacturing facility and try and remain as liquid as possible.

UNCLAIMED / UNPAID DIVIDEND (TRANSFER TO INVESTOR EDUCATION & PROTECTION FUNDI

Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, unclaimed dividend which remains unpaid for a period of seven years shall be transferred to Investor Education & Protection Fund. Accordingly, the Company is not yet required to transfer unclaimed dividend to the said fund.

It may be noted that upon the transfer of dividend to Investor Education & Protection Fund, members lose their right to claim such dividend. Therefore Members are requested to claim the amount of Unpaid/unclaimed dividend fortheyear2010-2011 onwards.

SUBSIDIARY COMPANIES

Your Company has incorporated a wholly owned foreign subsidiary Company in Dubai at the Dubai Multi Commodities Centre (DMCC), UAE in the name of SUNRAJ DIAMONDS DMCC. The above subsidiary company has started it''s business operations in the year under review.

CONSOLIDATED FINANCIAL STATEMENT

Sunraj group has reported a consolidated revenue of Rs. 65.82 crores for the financial year ended on 31st March, 2013, Consolidated profit before tax stood atRs. 1.93 crores and consolidated Profit after tax stood at Rs. 1.61 Crores. There are no consolidated figures available for the previous year as the subsidiary company has started it''s business operations only from January 2013. In accordance with the Accounting Standard AS-21 on Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for investment in Associates, your Directors provide the Consolidated Audited Financial Statement in the Annual Report.

However, in accordance with the general circular No. 2/2011 dated 8th Feb, 2011, issued by the Ministry of Corporate affairs, Government of India, the Balance Sheet, Profit and Loss account and other documents of the subsidiary company are not being attached with balance sheet of the Company. However the financial information of the subsidiary company is disclosed in the Annual Report in compliance with the said circular. Your Company will make available the said annual accounts and other related information of the subsidiary company upon request of any member of the Company or its subsidiary company and same will also be kept open for inspection by any member at the registered office of the Company and subsidiary company.

DIRECTORATE:

In accordance with Article 109 of the Articles of Association of the Company, Mr. Sunil Gandhi and Mr. Hargovind Shah retire by rotation but being eligible, offers themselves for re-appointment.

PARTICULARS OF EMPLOYESS.

The Company does not have any employee covered under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and therefore, this information has not been furnished as part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that:

I) In the preparation of the annual accounts, the applicable accounting standards have bee followed;

ii) Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March, 31st 2013 and of the Company for the period 1st April, 2012 to 31st March, 2013.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounts records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv)The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 to the Listing Agreement with the Stock Exchange a Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance form part of this Report.

AUDITORS:

Shareholders are requested to appoint Auditors to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting. The retiring Auditors, M/s Bhupendra Shroff &Co., being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS:

The Directors acknowledge the co-operation and assistance received from the Banks and various Government agencies both Central and State.

The Directors wish to place on record their sincere appreciation of the contribution made by the employees at all levels of the organizations who have greatly contributed to the results.

For and on behalf of the Board of Directors

SUNNY GANDHI NIRAVSHAH

Executive Director Executive Director

Place: Mumbai,

Dated: 29thJune, 2013


Mar 31, 2010

The Directors have pleasure in presenting their Twentieth Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS: 31st March, 2010 31st March, 2009

Profit before Depreciation and Interest 45,53,943 20,64,862

Less: Depreciation 841,674 7,08,619

Interest & Financial Expenses 18,83,646 27,25,320 13,05,183 20,13,802

Profit before Tax 18,28,623 51,060

Less: Provision for Taxation 375,000 1,25,000

Deferred Tax 140,297 37,950

Fringe Benefit Tax - 515,297 92,141 2,55,091

Profit for the year 13,13,326 (2,04,031)

Add/(Less): Provision of earlier years w/off (23,360) 1,21,342

Add: Surplus brought forward from previous year 1,96,95,613 1,97,78,302 Balance Carried to Balance Sheet 2,09,85,580 1,96,95,613



DIVIDEND:

With a view to conserving the resources, your Directors have decided not to recommend Dividend for the year.

OPERATIONS:

During the year under review the Company has recorded a turnover of Rs. 3,430.01 Lacs. Due to resurgence in Demand for Diamonds, the company has managed to capitalize on the opportunities available during the financial year. Reviving old accounts of Clients who were cautious during the recession, company has seen Sales increase substantially as prices were extremely competitive and trade was robust. The company is continuing its aggressive approach towards maintaining a steady level of growth for the year ahead.

DIRECTORATE:

In accordance with Article 109 of the Articles of Association of the Company, Mr. Nirav Shah retires by rotation but being eligible, offers himself for re-appointment.

Mr. Jimit Shah was appointed as Additional Director of the Company on 5th March, 2010. By virtue of the provisions of Section 260 of the Companies Act, 1956 he shall hold office only upto the conclusion of this Annual General Meeting. The Company has received Notices in writing from members of the Company proposing his candidature for the office of Director in accordance with Section 257 of the Companies Act, 1956.

The Directors recommend his appointment as Director liable to retire by rotation.

Mr. Rishi Mehra, Director resigned from the Board on 5th March, 2010. Your Directors wish to place on record their appreciation for the services rendered by Mr. Rishi Mehra during his tenure as Director of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the annexure to the Report.

PARTICULARS OF EMPLOYEES:

The Company does not have any employee covered under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and therefore, this information has not been furnished as part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March, 31st 2010 and of the Company for the period 1st April, 2009 to 31st March, 2010.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounts records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 to the Listing Agreement with the Stock Exchange a Management Discussion and Analysis, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance form part of this Report.

AUDITORS:

Shareholders are requested to appoint Auditors to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting. The retiring Auditors, M/s Bhupendra Shroff & Co., being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS:

The Directors acknowledge the co-operation and assistance received from the Banks and various Government agencies both Central and State.

The Directors wish to place on record their sincere appreciation of the contribution made by the employees at all levels of the organizations who have greatly contributed to the results.

For and on behalf of the Board of Directors

Place : Mumbai, S. S. GANDHI NIRAV SHAH

Dated : 19th August, 2010 Executive Director Executive Director

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